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With ecommerce continuing to grow, there has been rapid growth in the number of solutions and services available to address warehouse management needs and challenges.
One of the best options for ecommerce businesses with their own warehouse is SaaS WMS, which is a cost-effective warehouse management solution that provides both control and visibility into operations.
In this article, we discuss what the double acronym SaaS WMS is and how you can use it to streamline your warehouse management.
What is SaaS WMS?
SaaS WMS refers to software-as-a-service warehouse management system.
This type of warehouse solution is a cloud-based software that allows merchants to track warehouse activity and inventory levels in real time — no matter how many warehouses or fulfilment centers are used.
SaaS WMS is a robust yet minimal investment solution that’s easy to implement.
How does a SaaS WMS work?
SaaS WMS is a type of warehouse management software that’s hosted in the cloud and maintained by a software company or third-party logistics provider. The vendor manages the servers, while giving retailers access through regular subscription fees.
You can securely access the WMS from any computer via an internet connection and use it to keep track of warehouse and inventory activity at any time.
With this type of WMS, retailers don’t have to worry about investing in expensive infrastructure or managing their own servers for greater flexibility and affordability.
3 benefits of implementing SaaS WMS in your supply chain
With flexibility and affordability on its side, there are a number of reasons why retailers choose to implement a SaaS WMS solution into their ecommerce supply chain. Here are the three most common benefits.
1. More scalable and flexible
Many ecommerce brands start out small and eventually expand to meet the needs of customers across the country or even globe.
For example, a SaaS WMS enables business owners to start with in-house fulfilment. If they outgrow their warehouse and don’t want to be stuck in additional leases, many will even partner with a third-party logistics (3PL) company to expand into multiple fulfilment centers (or use a hybrid fulfilment approach) and make it easier to sell across sales channels.
A SaaS WMS is the ideal solution for many online brands as it requires minimal infrastructure and investment to start.
Plus, it offers plenty of room for logistics expansion to support increased order volume, to improve order accuracy, and to maintain visibility across operations.
With traditional warehouse management systems, it’s not common to have to pay an upfront lump sum or onboarding payment.
Additionally, some vendors may require you to pay fees for customizations, upgrades, database management, and server licenses. As many retailers have invested a lot of money into their WMS, they may feel compelled to keep using the system even if they’re not 100% happy with it.
On the other hand, a SaaS WMS is more subscription-based where you pay a monthly or yearly fee to use the system and the associated services.
This means you don’t have to be tied down to the WMS even if you change your mind later on. Plus, the costs tend to be more affordable since you don’t have to invest in additional infrastructure to support the system.
3. Better security
Maintaining security in a traditional WMS can be expensive and complicated, typically requiring a server on sites and a database expert to conduct backups, resiliency checks, and database management on a regular basis.
Meanwhile, SaaS WMS providers deliver security, resilience, and backups at a far higher specification than most ecommerce retailers can do themselves. As a result, using a SaaS WMS may guarantee better security in the long run.
SaaS WMS vs. cloud-based WMS
SaaS WMS and cloud-based WMS are two different types of warehouse management solutions that are often mistaken for each other because of the many similarities they share.
They’re essentially both “cloud-based” because they’re hosted and deployed in the cloud. Plus, they may both use a SaaS payment model in which users pay a monthly or annual subscription fee to keep using the WMS.
However, there are a few key differences to note.
What is cloud-based WMS?
As the name suggests, a cloud-based WMS is a warehouse management system that’s hosted and deployed in the cloud. Users can manage their warehouse processes without having to set up and manage their own servers and other infrastructure.
While this may make cloud-based WMS similar to a SaaS WMS, the key difference is that it exists on a private hosted or segregated server. Meanwhile, a SaaS WMS exists on shared infrastructure.
Both SaaS WMS and cloud-based WMS are managed by the software vendor, who is also in charge of upgrades and maintenance.
Which one should you choose?
Both cloud-based and SaaS WMS are extremely similar, which makes it difficult to choose between the two. Here’s a breakdown of the key differences.
|Exists on shared infrastructure
|Exists on private hosted or segregated server
|Used out-of-the-box; minimal customizability
|Faster implementation time
|Requires more time to implement
|More affordable option
|Requires more financial investment than SaaS
|Ideal for startups and small businesses
|Ideal for mid-market and enterprise businesses
How to choose the right SaaS WMS solution for your business
Since there are multiple SaaS WMS solutions available, the process of narrowing down the best option can be hard whether you’re a small business owner or SaaS product manager. Here are some tips to help you choose the right SaaS WMS solution for your business.
Be mindful of your budget
While you may be considering the cheapest option in the market, that’s not necessarily the best choice.
Often, the cheapest solutions may also come with the most basic features and you’ll eventually have to keep adding more integrations and services to support your business needs, with the costs quickly building up.
It’s important that you keep your budget in mind but also look for something that’s most cost-effective in the long run, considering the features and services that come with it.
“We interviewed around a dozen different SaaS providers before ShipBob was on our radar, and I felt like none of them met our needs. They were all missing key features that you can’t run a business without.
Then, I stumbled across ShipBob. From the very first call, I thought, “This is it.” ShipBob is a global fulfilment platform that wrote its own software instead of using someone else’s, and uses it to run their own outsourced fulfilment service. That was definitely a solution we could trust, and the solution we wanted.”Ben Tietje, Co-Founder and CEO of Earthley
Make sure it has all the features you need
As briefly mentioned above, your SaaS WMS should have all the features you need to effectively manage your warehouse processes.
While the specifics may vary for each business, some of the key features to look for include:
- Access to real-time inventory levels, allowing for more visibility
- Multi-warehouse support to track warehouse activity across locations
- Omnichannel capabilities to manage orders from multiple sales channels
- The ability to monitor picking and packing workflows and lot tracking
- Inventory management tools, such as reorder point notifications
- Data and analytics for inventory, picking and packing, and shipping
- Prioritizing cloud security issues
“Our order picking and routing has greatly improved with ShipBob. With ShipBob’s WMS, we can create the most efficient routes through the warehouse, which has cut down on an insane amount of time and made picking, packing, and shipping so much more efficient.
Running a warehouse is unpredictable. But ShipBob has definitely helped with that. Thanks to ShipBob’s WMS, we have access to more data. Now we know how many orders an employee can complete in an hour so we can forecast for labour a lot better than we did before.”Jourdan Davis, Operations Manager at Pit Viper
Ensure they have the right support system
Warehouse management systems are often complex and challenging to manage.
One of the benefits of a SaaS WMS is control, but it still requires access to support from experts who can help you with database management, security and resiliency checks, and even initial deployment.
For instance, ShipBob offers a WMS solution for merchants that fulfil orders in-house (and can even take advantage of ShipBob’s global fulfilment network), providing software and ongoing support for their customers.
“With volatility and everything happening in the industry, ShipBob powering our warehouse, while allowing me to tap into their entire fulfilment platform and relationships, was the best thing that could have happened.
When my business was brand new, we had used one of the large shipping software options, but they were pretty much only good for label printing. Having no prior warehouse management experience, the ShipBob solution has helped my team accelerate what would have been a very steep learning curve.”Courtney Lee, founder of Prymal
ShipBob can help you streamline your warehouse management
ShipBob’s WMS empowers you to scale your business through virtually endless software integrations and partnerships that let you build a highly customised solution to address all your needs, from omnichannel fulfilment to DDP shipping.
In addition, ShipBob provides access to leading carriers, a hands-on dedicated account manager and customer support team, plus a full suite of tools to run your entire ecommerce supply chain, including a global network of fulfilment centre locations if you want to further reduce transit times and shipping costs.
When you outsource fulfilment to ShipBob, you gain better fulfilment solutions and support, all without having to invest in the individual components that make up warehouse management.
SaaS WMS FAQs
Below are answers to the top questions about SaaS WMS.
What is a SaaS WMS?
SaaS WMS is a cloud-based warehouse management system where the software provider is also in charge of maintaining the system, but provides full control and visibility for the merchant.
What does a WMS do?
A WMS monitors and controls daily operations in a warehouse. WMS software helps ensure inventory is received, stored, picked, packed, shipped, and replenished in the most efficient way possible.
What are the benefits of WMS?
A WMS helps businesses to get visibility into their inventory, optimise their storage space, improve accuracy, and increase productivity.
What is the cost of a WMS?
It all depends. A more advanced WMS will be more expensive for the additional functionality it provides. One study found some businesses are spending around $167 per user for basic WMS functionality (does not include all associated costs).